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Kelly’s Chester Company Analysis Essay

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Updated: Apr 1st, 2020

Kelly’s Chester Company is among the leading suppliers of sensors, that provides many manufacturers with the products. It has its headquarters in Indiana State, but it has its exports its goods to many nations across the world. Established in 1960 by William Chester, the firm has undergone many transformations that have enabled it to gain more market shares and a competitive advantage over the years.

Although it was originally known as Chester Company Limited, the business establishment was changed to Kelly’s Chester Company in the 2000, when its founder allowed his sister to own a significant number of shares. However, being one of the biggest employers in Indiana State, the management of the organization has allowed employees and family members to own stock in the firm.

However, this was only made possible after the adoption of an ESOP (Employee Stock Ownership Plan), which was adopted in the early 2000s. As a result, it improved its performance outcomes due to relatively high levels of loyalty among family members and workers, who are the main drivers of the firm. It is important to note that Kelly’s Chester Company operates on a platform of reputable heritage that has enabled it to be one of the giant firms in the sensors industry.

In order to ensure consistent growth in the competitive industry, the management has focused on serving the medium and high technology equipment manufacturers. It acquired important development capabilities and channels used in the sales and distribution of its products, which have enabled it to efficiently meet demands of consumers.

For example, in the late 1970s, the management focused on establishing a wide range of distributors in the US and Europe that could enable to market sensors of the business organization. In fact, the efforts started to pay off when earnings more than tripled.

Team Management (team charter, roles/responsibilities, and work effectiveness/efficiency)

One year after foundation of Kelly’s Chester Company, William Chester, encouraged stakeholders to adopt a team charter that was aimed at achieving two goals. First, it was envisaged that it would provide a clear focus and direction of all stakeholders. Second, the founder thought that it would be critical in educating team members about the goals, mission, and values of the company.

In this context, it can be stated that the charter has been a vital document that has helped the firm to achieve excellent outcomes. For example, employees and family members concentrate on achieving objectives that are outlined in the charter. In addition, it helps the management to refocus when things are not working well. In fact, in a business world that is typified by relatively high levels of competition, it is crucial for the management teams of companies to adopt team charters.

In order to ensure that operations are conducted effectively, the business establishment has ensured that roles and responsibilities are distributed among workers, to achieve an organizational structure that is not exemplified by duplication of duties. Directors of the firm are William Chester and Kelly Chester, who have executive powers. A chief finance officer is critical in budgeting and assessing financial attributes of the firm.

A general manager oversees operations in all countries in which Kelly’s Chester Company operates, but he or she receives updates from country managers. Departmental heads are charged with the responsibilities of facilitating activities within departments. Line managers aim at achieving the best outcomes within each line of production. The company is typified by many teams, which are spearheaded by team leaders for directing team members toward achieving both short-term and long-term goals.

Work efficiency within the firm is achieved by adopting strategic management approaches, which include an effective organizational structure. In fact, it is important to assert that the firm has been realizing exemplary outcomes due to the strategies that are utilized by the management.

For example, duties for each stakeholder are clearly outlined to avoid any form of confusion that may be associated with negative outcomes. In addition, distribution of duties helps to ensure that duties are not duplicated. Work efficiency is also promoted by the flow of information from the top management to the bottom and vice-versa.

Industry analyses

Five forces

  1. Threat of new entrants-low. In the sensors industry, the threat that is associated with new market entrants is relatively low, but business rivals can enter and leave markets with a lot of ease. Thus, it is difficult to forecast the future with high levels of accuracy.
  2. Buyer power-high. Buyers are exemplified by high power due to the fact that their demands determine how firms manufacture sensors.
  3. Supplier power-low. In this sector, suppliers deliver materials to buyers only after they receive payments. Therefore, Kelly’s Chester Company pays its suppliers as quickly as possible in order to have continuous supplies.
  4. Threat of substitutes-low. Due to the relatively high levels of technology involved in the manufacturer of sensors, it is important to note that the threat of substitutes is low.
  5. Competition-high. The business establishment faces competition from some of well established firms in the market. Currently, the company serves customers in both low-end and high-end markets, which are also penetrated by its rivals. Four products of the company have enabled it to achieve a market share of 42%. However, it is worrying that rivals are present in every market segment.

Specific competitors

  1. Digby. In the recent past, its stock has appreciated remarkably. It has more products that Kelly’s Chester Company, implying that it is a main competitor. However, it has been shown that the firm does not have the ability of efficient line management.
  2. Erie. In the last financial year, the business establishment did not do so well do to that fact two of its lines were not well stocked, but it still recorded impressive results in relation to the other product lines. Thus, it would be one of the business rivals in the near future.
  3. Ferris. This firm is exemplified by unpredictable financial outcomes, but it sells about ten products in the same segments with Kelly’s Chester Company. Thus, the management of the firm being analyzed must take into consideration that Ferris might be a main rival in many market segments.
  4. Andrews. This firm is well established in low-end, traditional, and high-end market segments, implying that it meets demands of the most customers in the markets. Although it does not take advantage to adequately forecast market trends, it could be pose main challenges to the management of Kelly’s Chester Company.

Competitive position

As demonstrated in the five forces analysis, it is evident that Kelly’s Chester Company is one of leading players in the sensors industry. it controls a market share of 54%, but the levels of competition are relatively high. However, the management can maintain the market lead by continuing to adopt strategic management approaches.

SWOT analysis

The table below is utilized to summarize the SWOT analysis of the organization:

-A global brand
-Customer loyalty
-Effective corporate social responsibility
-Strong marketing and advertising
-Wide distribution channels
-Undiversified product portfolio
-Negative publicity
-Brand failures
-Growth through acquisitions
-Increase in demand for sensors across the world
-Expansion of the high-end market segments
-Changes in customer demands
-Stiff competition
-Negative impacts of a strong dollar
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